Connecticut 2011 Regular Session

Connecticut House Bill HB06363 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	General Assembly Raised Bill No. 6363
2	2	January Session, 2011 LCO No. 3428
3	3	03428_______INS
4	4	Referred to Committee on Insurance and Real Estate
5	5	Introduced by:
6	6	(INS)
7	7
8	8	General Assembly
9	9
10	10	Raised Bill No. 6363
11	11
12	12	January Session, 2011
13	13
14	14	LCO No. 3428
15	15
16	16	03428_______INS
17	17
18	18	Referred to Committee on Insurance and Real Estate
19	19
20	20	Introduced by:
21	21
22	22	(INS)
23	23
24	24	AN ACT ADOPTING THE NATIONAL CONFERENCE OF INSURANCE LEGISLATORS' SURPLUS LINES INSURANCE MULTISTATE COMPLIANCE COMPACT.
25	25
26	26	Be it enacted by the Senate and House of Representatives in General Assembly convened:
27	27
28	28	Section 1. (NEW) (Effective July 1, 2011):
29	29
30	30	PREAMBLE
31	31
32	32	WHEREAS, with regard to nonadmitted insurance policies with risk exposures located in multiple states, the 111th United States Congress, has stipulated in Title V, Subtitle B the Nonadmitted and Reinsurance Reform Act of 2010, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, hereafter, the NRRA, that:
33	33
34	34	(A) The placement of nonadmitted insurance shall be subject to the statutory and regulatory requirements solely of the insured's home state, and
35	35
36	36	(B) Any law, regulation, provision, or action of any state that applies or purports to apply to nonadmitted insurance sold to, solicited by, or negotiated with an insured whose home state is another state shall be preempted with respect to such application, except that any state law, rule, or regulation that restricts the placement of workers' compensation insurance or excess insurance for self-funded workers' compensation plans with a nonadmitted insurer shall not be preempted;
37	37
38	38	WHEREAS, in compliance with NRRA, no state other than the home state of an insured may require any premium tax payment for nonadmitted insurance, and no state other than an insured's home state may require a surplus lines broker to be licensed in order to sell, solicit, or negotiate nonadmitted insurance with respect to such insured;
39	39
40	40	WHEREAS, the NRRA intends that the states may enter into a compact or otherwise establish procedures to allocate among the states the premium taxes paid to an insured's home state and that each state adopt nationwide uniform requirements, forms, and procedures, such as an interstate compact, that provide for the reporting, payment, collection, and allocation of premium taxes for nonadmitted insurance;
41	41
42	42	WHEREAS, after the expiration of the two-year period beginning on the date of the enactment of the NRRA, a state may not collect any fees relating to licensing of an individual or entity as a surplus lines licensee in the state unless the state has in effect at such time laws or regulations that provide for participation by the state in the national insurance producer database of the National Association of Insurance Commissioners, or any other equivalent uniform national database, for the licensure of surplus lines licensees and the renewal of such licenses;
43	43
44	44	WHEREAS, a need exists for a system of regulation that will provide for surplus lines insurance to be placed with reputable and financially sound nonadmitted insurers, and that will permit orderly access to surplus lines insurance in this state and encourage insurers to make new and innovative types of insurance available to consumers in this state;
45	45
46	46	WHEREAS, protecting the revenue of this state and other compacting states may be accomplished by facilitating the payment and collection of premium tax on nonadmitted insurance and providing for allocation of premium tax for nonadmitted insurance of multistate risks among the states in accordance with uniform allocation formulas;
47	47
48	48	WHEREAS, the efficiency of the surplus lines market may be improved by eliminating duplicative and inconsistent tax and regulatory requirements among the states, and by promoting and protecting the interests of surplus lines licensees who assist such insureds and nonadmitted insurers, thereby ensuring the continued availability of nonadmitted insurance to consumers;
49	49
50	50	WHEREAS, regulatory compliance with respect to nonadmitted insurance placements may be streamlined by providing for exclusive single-state regulatory compliance for nonadmitted insurance of multistate risks, thereby providing certainty regarding such compliance to all persons who have an interest in such transactions, including but not limited to insureds, regulators, surplus lines licensees, other insurance producers, and surplus lines insurers;
51	51
52	52	WHEREAS, coordination of regulatory resources and expertise between state insurance departments and other state agencies, as well as state surplus lines stamping offices, with respect to nonadmitted insurance will be improved;
53	53
54	54	NOW, THEREFORE, in consideration of the foregoing, the state of Connecticut and the various other states do hereby solemnly covenant and agree, each with the other as follows:
55	55
56	56	ARTICLE I
57	57
58	58	Purpose
59	59
60	60	The purposes of this compact are:
61	61
62	62	1. To implement the express provisions of the NRRA;
63	63
64	64	2. To protect the premium tax revenues of the compacting states through facilitating the payment and collection of premium tax on nonadmitted insurance and to protect the interests of the compacting states by supporting the continued availability of such insurance to consumers; and to provide for allocation of premium tax for nonadmitted insurance of multistate risks among the states in accordance with uniform allocation formulas to be developed, adopted, and implemented by the Commission;
65	65
66	66	3. To streamline and improve the efficiency of the surplus lines market by eliminating duplicative and inconsistent tax and regulatory requirements among the states, and promote and protect the interest of surplus lines licensees who assist such insureds and surplus lines insurers, thereby ensuring the continued availability of surplus lines insurance to consumers;
67	67
68	68	4. To streamline regulatory compliance with respect to nonadmitted insurance placements by providing for exclusive single-state regulatory compliance for nonadmitted insurance of multistate risks, in accordance with rules to be adopted by the Commission, thereby providing certainty regarding such compliance to all persons who have an interest in such transactions, including, but not limited to, insureds, regulators, surplus lines licensees, other insurance producers and surplus lines insurers;
69	69
70	70	5. To establish a Clearinghouse for receipt and dissemination of premium tax and Clearinghouse transaction data related to nonadmitted insurance of multistate risks, in accordance with rules to be adopted by the Commission;
71	71
72	72	6. To improve coordination of regulatory resources and expertise between state insurance departments and other state agencies, as well as state surplus lines stamping offices, with respect to nonadmitted insurance;
73	73
74	74	7. To adopt uniform rules to provide for premium tax payment, reporting, allocation, data collection and dissemination for nonadmitted insurance of multistate risks and single-state risks, in accordance with rules to be adopted by the Commission, thereby promoting the overall efficiency of the nonadmitted insurance market;
75	75
76	76	8. To adopt uniform mandatory rules with respect to regulatory compliance requirements for:
77	77
78	78	(A) Foreign insurer eligibility requirements; and
79	79
80	80	(B) Surplus lines policyholder notices;
81	81
82	82	9. To establish the Commission;
83	83
84	84	10. To coordinate reporting of Clearinghouse transaction data on nonadmitted insurance of multistate risks among compacting states and contracting states;
85	85
86	86	11. To perform these and such other related functions as may be consistent with the purposes of this compact.
87	87
88	88	ARTICLE II
89	89
90	90	Definitions
91	91
92	92	For purposes of this compact the following definitions shall apply:
93	93
94	94	1. "Admitted insurer" means an insurer that is licensed, or authorized, to transact the business of insurance under the law of the home state for purposes of this compact. "Admitted insurer" shall not include a domestic surplus lines insurer as may be defined by applicable state law;
95	95
96	96	2. "Affiliate" means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured;
97	97
98	98	3. "Allocation formula" means the uniform methods promulgated by the Commission by which insured risk exposures will be apportioned to each state for the purpose of calculating premium taxes due;
99	99
100	100	4. "Bylaws" means those bylaws established by the Commission for its governance, or for directing or controlling the Commission's actions or conduct;
101	101
102	102	5. "Clearinghouse" means the Commission's operations involving the acceptance, processing, and dissemination, among the compacting states, contracting states, surplus lines licensees, insureds and other persons, of premium tax and Clearinghouse transaction data for nonadmitted insurance of multistate risks, in accordance with this compact and rules to be adopted by the Commission;
103	103
104	104	6. "Clearinghouse transaction data" means the information regarding nonadmitted insurance of multistate risks, required to be reported, accepted, collected, processed, and disseminated by surplus lines licensees for surplus lines insurance and insureds for independently procured insurance under this compact and rules to be adopted by the Commission. Clearinghouse transaction data includes information related to single-state risks if a state elects to have the Clearinghouse collect taxes on single-state risks for such state;
105	105
106	106	7. "Compacting state" means any state which has enacted this compact legislation and which has not withdrawn pursuant to section 1 of Article XIV of this compact or been terminated pursuant to section 2 of Article XIV of this compact;
107	107
108	108	8. "Commission" means the Surplus Lines Insurance Multistate Compliance Compact Commission established by this compact;
109	109
110	110	9. "Commissioner" means the chief insurance regulatory official of a state including, but not limited to commissioner, superintendent, director or administrator or their designees;
111	111
112	112	10. "Contracting state" means any state which has not enacted this compact legislation but has entered into a written contract with the Commission to utilize the services of and fully participate in the Clearinghouse;
113	113
114	114	11. "Control": An entity has control over another entity if:
115	115
116	116	(A) The entity directly or indirectly or acting through one or more other persons owns, controls or has the power to vote twenty-five per cent or more of any class of voting securities of the other entity; or
117	117
118	118	(B) The entity controls in any manner the election of a majority of the directors or trustees of the other entity;
119	119
120	120	12. "Home state":
121	121
122	122	(A) IN GENERAL. Except as provided in subparagraph (B) of this subdivision, "home state" means, with respect to an insured:
123	123
124	124	(i) The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or
125	125
126	126	(ii) If one hundred per cent of the insured risk is located out of the state referred to in subparagraph (A)(i) of this subdivision, the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated;
127	127
128	128	(B) AFFILIATED GROUPS. If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, "home state" means the home state, as determined pursuant to subparagraph (A) of this subdivision, of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract;
129	129
130	130	13. "Independently procured insurance" means insurance procured by an insured directly from a surplus lines insurer or other nonadmitted insurer as permitted by the laws of the home state;
131	131
132	132	14. "Insurer eligibility requirements" means the criteria, forms and procedures established to qualify as a surplus lines insurer under the law of the home state, provided that such criteria, forms and procedures are consistent with the express provisions of the NRRA on and after July 21, 2011;
133	133
134	134	15. "Member" means the person or persons chosen by a compacting state as its representative or representatives to the Commission provided that each compacting state shall be limited to one vote;
135	135
136	136	16. "Multistate risk" means a risk with insured exposures in more than one state;
137	137
138	138	17. "Noncompacting state" means any state which has not adopted this compact;
139	139
140	140	18. "Nonadmitted insurance" means surplus lines insurance and independently procured insurance;
141	141
142	142	19. "Nonadmitted insurer" means an insurer that is not authorized or admitted to transact the business of insurance under the law of the home state;
143	143
144	144	20. "NRRA" means the Nonadmitted and Reinsurance Reform Act of 2010, which is Title V, Subtitle B of the Dodd-Frank Wall Street Reform and Consumer Protection Act;
145	145
146	146	21. "Policyholder notice" means the disclosure notice or stamp that is required to be furnished to the applicant or policyholder in connection with a surplus lines insurance placement;
147	147
148	148	22. "Premium tax" means, with respect to nonadmitted insurance, any tax, fee, assessment, or other charge imposed by a government entity directly or indirectly based on any payment made as consideration for such insurance, including premium deposits, assessments, registration fees, and any other compensation given in consideration for a contract of insurance;
149	149
150	150	23. "Principal place of business" means, with respect to determining the home state of the insured, the state where the insured maintains its headquarters and where the insured's high-level officers direct, control and coordinate the business activities of the insured;
151	151
152	152	24. "Purchasing group" means any group formed pursuant to the Liability Risk Retention Act which has as one of its purposes the purchase of liability insurance on a group basis, purchases such insurance only for its group members and only to cover their similar or related liability exposure and is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations, and is domiciled in any state;
153	153
154	154	25. "Rule" means a statement of general or particular applicability and future effect promulgated by the Commission designed to implement, interpret, or prescribe law or policy or describing the organization, procedure or practice requirements of the Commission which shall have the force and effect of law in the compacting states;
155	155
156	156	26. "Single-state risk" means a risk with insured exposures in only one state;
157	157
158	158	27. "State" means any state, district or territory of the United States of America;
159	159
160	160	28. "State transaction documentation" means the information required under the laws of the home state to be filed by surplus lines licensees in order to report surplus lines insurance and verify compliance with surplus lines laws, and by insureds in order to report independently procured insurance;
161	161
162	162	29. "Surplus lines insurance" means insurance procured by a surplus lines licensee from a surplus lines insurer or other nonadmitted insurer as permitted under the law of the home state. For purposes of this compact, "surplus lines insurance" shall also mean excess lines insurance as may be defined by applicable state law;
163	163
164	164	30. "Surplus lines insurer" means a nonadmitted insurer eligible under the law of the home state to accept business from a surplus lines licensee. For purposes of this compact, "surplus lines insurer" also means an insurer which is permitted to write surplus lines insurance under the laws of the state where such insurer is domiciled;
165	165
166	166	31. "Surplus lines licensee" means an individual, firm or corporation licensed under the law of the home state to place surplus lines insurance.
167	167
168	168	ARTICLE III
169	169
170	170	Establishment of the Commission and Venue
171	171
172	172	1. The compacting states hereby create and establish a joint public agency known as the Surplus Lines Insurance Multistate Compliance Compact Commission.
173	173
174	174	2. Pursuant to Article IV of this compact, the Commission will have the power to adopt mandatory rules which establish exclusive home state authority regarding nonadmitted insurance of multistate risks, allocation formulas, Clearinghouse transaction data, a Clearinghouse for receipt and distribution of allocated premium tax and Clearinghouse transaction data and uniform rulemaking procedures and rules for the purpose of financing, administering, operating and enforcing compliance with the provisions of this compact, its bylaws and rules.
175	175
176	176	3. Pursuant to Article IV of this compact, the Commission will have the power to adopt mandatory rules establishing foreign insurer eligibility requirements and a concise and objective policyholder notice regarding the nature of a surplus lines placement.
177	177
178	178	4. The Commission is a body corporate and politic, and an instrumentality of the compacting states.
179	179
180	180	5. The Commission is solely responsible for its liabilities, except as otherwise specifically provided in this compact.
181	181
182	182	6. Venue is proper and judicial proceedings by or against the Commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the Commission is located. The Commission may waive venue and jurisdictional defenses to the extent it adopts or consents to participate in alternative dispute resolution proceedings.
183	183
184	184	ARTICLE IV
185	185
186	186	Authority to Establish Mandatory Rules
187	187
188	188	The Commission shall adopt mandatory rules which establish:
189	189
190	190	1. Allocation formulas for each type of nonadmitted insurance coverage, which allocating formulas must be used by each compacting state and contracting state in acquiring premium tax and Clearinghouse transaction data from surplus lines licensees and insureds for reporting to the Clearinghouse created by the compact Commission. Such allocation formulas will be established with input from surplus lines licensees and shall be based upon readily available data with simplicity and uniformity for the surplus line licensee as a material consideration;
191	191
192	192	2. Uniform Clearinghouse transaction data reporting requirements for all information reported to the Clearinghouse;
193	193
194	194	3. Methods by which compacting states and contracting states require surplus lines licensees and insureds to pay premium tax and to report Clearinghouse transaction data to the Clearinghouse, including, but not limited to, processing Clearinghouse transaction data through state stamping and service offices, state insurance departments or other state-designated agencies or entities;
195	195
196	196	4. That nonadmitted insurance of multistate risks shall be subject to all of the regulatory compliance requirements of the home state exclusively.
197	197
198	198	(A) Home state regulatory compliance requirements applicable to surplus lines insurance shall include, but not be limited to, (i) person or persons required to be licensed to sell, solicit, or negotiate surplus lines insurance, (ii) insurer eligibility requirements or other approved nonadmitted insurer requirements, (iii) diligent search, (iv) state transaction documentation and Clearinghouse transaction data regarding the payment of premium tax as set forth in this compact and rules to be adopted by the Commission;
199	199
200	200	(B) Home state regulatory compliance requirements applicable to independently procured insurance placements shall include, but not be limited to, providing state transaction documentation and Clearinghouse transaction data regarding the payment of premium tax as set forth in this compact and rules to be adopted by the Commission;
201	201
202	202	5. That each compacting state and contracting state may charge its own rate of taxation on the premium allocated to such state based on the applicable allocation formula, provided that the state establishes one single rate of taxation applicable to all nonadmitted insurance transactions and no other tax, fee assessment or other charge by any governmental or quasi governmental agency shall be permitted. Notwithstanding the foregoing, stamping office fees may be charged as a separate, additional cost unless such fees are incorporated into a state's single rate of taxation;
203	203
204	204	6. That any change in the rate of taxation by any compacting state or contracting state shall be restricted to changes made prospectively on not less than ninety days' advance notice to the Commission;
205	205
206	206	7. That each compacting state and contracting state shall require premium tax payments either annually, semi-annually or quarterly utilizing one or more of the following dates only: March 1, June 1, September 1, and December 1;
207	207
208	208	8. That each compacting state and contracting state shall prohibit any other state agency or political subdivision from requiring surplus lines licensees to provide state transaction documentation or Clearinghouse transaction data other than to the insurance department or tax officials of the home state or one single designated agent thereof;
209	209
210	210	9. The obligation of the home state by itself, through a designated agent, surplus lines stamping or service office, to collect Clearinghouse transaction data from surplus line licensees and from insureds for independently procured insurance, where applicable, for reporting to the Clearinghouse;
211	211
212	212	10. A method for the Clearinghouse to periodically report to compacting states, contracting states, surplus lines licensees and insureds who independently procure insurance, all premium taxes owed to each of the compacting states and contracting states, the dates upon which payment of such premium taxes are due and a method to pay them through the Clearinghouse;
213	213
214	214	11. That each surplus line licensee is required to be licensed in the home state of each insured for whom surplus lines insurance has been procured;
215	215
216	216	12. That a policy considered to be surplus lines insurance in the insured's home state shall be considered surplus lines insurance in all compacting states and contracting states, and taxed as a surplus lines transaction in all states to which a portion of the risk is allocated. Each compacting state and contracting state shall require each surplus lines licensee to pay to every other compacting state and contracting state premium taxes on each multistate risk through the Clearinghouse at such tax rate charged on surplus lines transactions in such other compacting states and contracting states on the portion of the risk in each such compacting state and contracting state, as determined by the applicable uniform allocation formula adopted by the Commission. Independently procured insurance in the insured's home state shall be considered independently procured insurance in all compacting states and contracting states. Each compacting state and contracting state shall require the insured to pay every other compacting state and contracting state the independently procured insurance premium tax on each multistate risk through the Clearinghouse pursuant to the uniform allocation formula adopted by the Commission;
217	217
218	218	13. Uniform foreign insurer eligibility requirements as authorized by the NRRA;
219	219
220	220	14. A uniform policyholder notice;
221	221
222	222	15. Uniform treatment of purchasing group surplus lines insurance placements.
223	223
224	224	ARTICLE V
225	225
226	226	Powers of the Commission
227	227
228	228	The Commission shall have the following powers:
229	229
230	230	1. To promulgate rules and operating procedures, pursuant to Article VIII of this compact, which shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this compact;
231	231
232	232	2. To bring and prosecute legal proceedings or actions in the name of the Commission, provided that the standing of any state insurance department to sue or be sued under applicable law shall not be affected;
233	233
234	234	3. To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence, provided, however, the Commission is not empowered to demand or subpoena records or data from nonadmitted insurers;
235	235
236	236	4. To establish and maintain offices, including the creation of a Clearinghouse, for the receipt of premium tax and Clearinghouse transaction data regarding nonadmitted insurance of multistate risks, single-state risks for states which elect to require surplus lines licensees to pay premium tax on single-state risks through the Clearinghouse and tax reporting forms;
237	237
238	238	5. To purchase and maintain insurance and bonds;
239	239
240	240	6. To borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state or stamping office, pursuant to an open, transparent, objective competitive process and procedure adopted by the Commission;
241	241
242	242	7. To hire employees, professionals or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of the compact, and determine their qualifications, pursuant to an open, transparent, objective competitive process and procedure adopted by the Commission; and to establish the Commission's personnel policies and programs relating to conflicts of interest, rates of compensation and qualifications of personnel, and other related personnel matters;
243	243
244	244	8. To accept any and all appropriate donations and grants of money, equipment, supplies, materials and services, and to receive, utilize and dispose of the same, provided that at all times the Commission shall avoid any appearance of impropriety or conflict of interest;
245	245
246	246	9. To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal or mixed, provided that at all times the Commission shall avoid any appearance of impropriety or conflict of interest;
247	247
248	248	10. To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed;
249	249
250	250	11. To provide for tax audit rules and procedures for the compacting states with respect to the allocation of premium taxes including:
251	251
252	252	(A) Minimum audit standards, including sampling methods;
253	253
254	254	(B) Review of internal controls;
255	255
256	256	(C) Cooperation and sharing of audit responsibilities between compacting states;
257	257
258	258	(D) Handling of refunds or credits due to overpayments or improper allocation of premium taxes;
259	259
260	260	(E) Taxpayer records to be reviewed including a minimum retention period; and
261	261
262	262	(F) Authority of compacting states to review, challenge, or reaudit taxpayer records;
263	263
264	264	12. To enforce compliance by compacting states and contracting states with rules and bylaws pursuant to the authority set forth in Article XIV of this compact;
265	265
266	266	13. To provide for dispute resolution among compacting states and contracting states;
267	267
268	268	14. To advise compacting states and contracting states on tax-related issues relating to insurers, insureds, surplus lines licensees, agents or brokers domiciled or doing business in noncompacting states, consistent with the purposes of this compact;
269	269
270	270	15. To make available advice and training to those personnel in state stamping offices, state insurance departments or other state departments for record-keeping, tax compliance, and tax allocations; and to be a resource for state insurance departments and other state departments;
271	271
272	272	16. To establish a budget and make expenditures;
273	273
274	274	17. To borrow money;
275	275
276	276	18. To appoint and oversee committees, including advisory committees comprised of members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in this compact and the bylaws;
277	277
278	278	19. To establish an Executive Committee of not less than seven nor more than fifteen representatives, which shall include officers elected by the Commission and such other representatives as provided for herein and determined by the bylaws. Representatives of the Executive Committee shall serve a one-year term. Representatives of the Executive Committee shall be entitled to one vote each. The Executive Committee shall have the power to act on behalf of the Commission, with the exception of rulemaking, during periods when the Commission is not in session. The Executive Committee shall oversee the day-to-day activities of the administration of the compact, including the activities of the Operations Committee created under this Article and compliance and enforcement of the provisions of the compact, its bylaws and rules and such other duties as provided herein and as deemed necessary;
279	279
280	280	20. To establish an Operations Committee of not less than seven and not more than fifteen representatives to provide analysis, advice, determinations and recommendations regarding technology, software, and systems integration to be acquired by the Commission and to provide analysis, advice, determinations and recommendations regarding the establishment of mandatory rules to be adopted by the Commission;
281	281
282	282	21. To enter into contracts with contracting states so that contracting states can utilize the services of and fully participate in the Clearinghouse subject to the terms and conditions set forth in such contracts;
283	283
284	284	22. To adopt and use a corporate seal;
285	285
286	286	23. To perform such other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance.
287	287
288	288	ARTICLE VI
289	289
290	290	Organization of the Commission
291	291
292	292	1. Membership, Voting and Bylaws
293	293
294	294	(A) Each compacting state shall have and be limited to one member. Each state shall determine the qualifications and the method by which it selects a member and set forth the selection process in the enabling provision of the legislation which enacts this compact. In the absence of such a provision, the member shall be appointed by the governor of such compacting state. Any member may be removed or suspended from office as provided by the law of the state from which he or she shall be appointed. Any vacancy occurring in the Commission shall be filled in accordance with the laws of the compacting state wherein the vacancy exists.
295	295
296	296	(B) Each member shall be entitled to one vote and shall otherwise have an opportunity to participate in the governance of the Commission in accordance with the bylaws.
297	297
298	298	(C) The Commission shall, by a majority vote of the members, prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes and exercise the powers of the compact, including, but not limited to:
299	299
300	300	(i) Establishing the fiscal year of the Commission;
301	301
302	302	(ii) Providing reasonable procedures for holding meetings of the Commission, the Executive Committee, and the Operations Committee;
303	303
304	304	(iii) Providing reasonable standards and procedures (I) for the establishment and meetings of committees, and (II) governing any general or specific delegation of any authority or function of the Commission;
305	305
306	306	(iv) Providing reasonable procedures for calling and conducting meetings of the Commission that consist of a majority of Commission members, ensuring reasonable advance notice of each such meeting and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals and insurers' and surplus lines licensees' proprietary information, including trade secrets. The Commission may meet in camera only after a majority of the entire membership votes to close a meeting in toto or in part. As soon as is practicable, the Commission must make public: (I) A copy of the vote to close the meeting revealing the vote of each member, with no proxy votes allowed, and (II) votes taken during such meeting;
307	307
308	308	(v) Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the Commission;
309	309
310	310	(vi) Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the Commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws shall exclusively govern the personnel policies and programs of the Commission;
311	311
312	312	(vii) Promulgating a code of ethics to address permissible and prohibited activities of Commission members and employees;
313	313
314	314	(viii) Providing a mechanism for winding up the operations of the Commission and the equitable disposition of any surplus funds that may exist after the termination of the compact and the payment and reserving of all of its debts and obligations.
315	315
316	316	(D) The Commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the compacting states.
317	317
318	318	2. Executive Committee, Personnel and Chairperson
319	319
320	320	(A) An Executive Committee of the Commission shall be established. All actions of the Executive Committee, including compliance and enforcement, are subject to the review and ratification of the Commission as provided in the bylaws. The Executive Committee shall have no more than fifteen representatives, or one for each state if there are less than fifteen compacting states, who shall serve for a term and be established in accordance with the bylaws.
321	321
322	322	(B) The Executive Committee shall have such authority and duties as may be set forth in the bylaws, including but not limited to:
323	323
324	324	(i) Managing the affairs of the Commission in a manner consistent with the bylaws and purposes of the Commission;
325	325
326	326	(ii) Establishing and overseeing an organizational structure within, and appropriate procedures for, the Commission to provide for the creation of rules and operating procedures;
327	327
328	328	(iii) Overseeing the offices of the Commission;
329	329
330	330	(iv) Planning, implementing, and coordinating communications and activities with other state, federal and local government organizations in order to advance the goals of the Commission.
331	331
332	332	(C) The Commission shall annually elect officers from the Executive Committee, with each having such authority and duties, as may be specified in the bylaws.
333	333
334	334	(D) The Executive Committee may, subject to the approval of the Commission, appoint or retain an executive director for such period, upon such terms and conditions and for such compensation as the Commission may deem appropriate. The executive director shall serve as secretary to the Commission but shall not be a member of the Commission. The executive director shall hire and supervise such other persons as may be authorized by the Commission.
335	335
336	336	3. Operations Committee
337	337
338	338	(A) (i) An Operations Committee shall be established. All actions of the Operations Committee are subject to the review and oversight of the Commission and the Executive Committee and must be approved by the Commission. The Executive Committee will accept the determinations and recommendations of the Operations Committee unless good cause is shown why such determinations and recommendations should not be approved. Any disputes as to whether good cause exists to reject any determination or recommendation of the Operations Committee shall be resolved by the majority vote of the Commission.
339	339
340	340	(ii) The Operations Committee shall have no more than fifteen representatives or one for each state if there are less than fifteen compacting states, who shall serve for a term as set forth in the bylaws.
341	341
342	342	(iii) The Operations Committee shall have responsibility for:
343	343
344	344	(I) Evaluating technology requirements for the Clearinghouse, assessing existing systems used by state regulatory agencies and state stamping offices to maximize the efficiency and successful integration of the Clearinghouse technology systems with state and state stamping office technology platforms and to minimize costs to the states, state stamping offices and the Clearinghouse;
345	345
346	346	(II) Making recommendations to the Executive Committee based on its analysis and determination of the Clearinghouse technology requirements and compatibility with existing state and state stamping office systems;
347	347
348	348	(III) Evaluating the most suitable proposals for adoption as mandatory rules, assessing such proposals for ease of integration by states, and likelihood of successful implementation and to report to the Executive Committee its determinations and recommendations;
349	349
350	350	(IV) Such other duties and responsibilities as are delegated to it by the bylaws, the Executive Committee or the Commission.
351	351
352	352	(B) All representatives of the Operations Committee shall be individuals who have extensive experience or employment in the surplus lines insurance business, including, but not limited to, executives and attorneys employed by surplus line insurers, surplus line licensees, law firms, state insurance departments or state stamping offices. Operations Committee representatives from compacting states which utilize the services of a state stamping office must appoint the Chief Operating Officer or a senior manager of the state stamping office to the Operations Committee.
353	353
354	354	4. Legislative and Advisory Committees
355	355
356	356	(A) A legislative committee comprised of state legislators or their designees shall be established to monitor the operations of and make recommendations to, the Commission, including the Executive Committee, provided that the manner of selection and term of any legislative committee member shall be as set forth in the bylaws. Prior to the adoption by the Commission of any uniform standard, revision to the bylaws, annual budget or other significant matter as may be provided in the bylaws, the Executive Committee shall consult with and report to the legislative committee.
357	357
358	358	(B) The Commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions.
359	359
360	360	5. Corporate Records of the Commission
361	361
362	362	The Commission shall maintain its corporate books and records in accordance with the bylaws.
363	363
364	364	6. Qualified Immunity, Defense and Indemnification
365	365
366	366	(A) The members, officers, executive director, employees and representatives of the Commission, the Executive Committee and any other committee of the Commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities; provided that nothing in this subparagraph shall be construed to protect any such person from suit or liability for any damage, loss, injury or liability caused by the intentional or wilful or wanton misconduct of that person.
367	367
368	368	(B) The Commission shall defend any member, officer, executive director, employee or representative of the Commission, the Executive Committee or any other committee of the Commission in any civil action seeking to impose liability arising out of any actual or alleged act, error or omission that occurred within the scope of Commission employment, duties or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities; provided that nothing herein shall be construed to prohibit that person from retaining his or her own counsel; and provided further, that the actual or alleged act, error or omission did not result from that person's intentional or wilful or wanton misconduct.
369	369
370	370	(C) The Commission shall indemnify and hold harmless any member, officer, executive director, employee or representative of the Commission, Executive Committee or any other committee of the Commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error or omission that occurred within the scope of Commission employment, duties or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of Commission employment, duties or responsibilities, provided that the actual or alleged act, error or omission did not result from the intentional or wilful or wanton misconduct of that person.
371	371
372	372	ARTICLE VII
373	373
374	374	Meetings and Acts of the Commission
375	375
376	376	1. The Commission shall meet and take such actions as are consistent with the provisions of this compact and the bylaws.
377	377
378	378	2. Each member of the Commission shall have the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the Commission. A member shall vote in person or by such other means as provided in the bylaws. The bylaws may provide for members' participation in meetings by telephone or other means of communication.
379	379
380	380	3. The Commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws.
381	381
382	382	4. Public notice shall be given of all meetings and all meetings shall be open to the public, except as set forth in the rules or otherwise provided in the compact.
383	383
384	384	5. The Commission shall promulgate rules concerning its meetings consistent with the principles contained in the Government in the Sunshine Act, 5 USC 552b, as may be amended.
385	385
386	386	6. The Commission and its committees may close a meeting, or portion thereof, where it determines by majority vote that an open meeting would be likely to:
387	387
388	388	(A) Relate solely to the Commission's internal personnel practices and procedures;
389	389
390	390	(B) Disclose matters specifically exempted from disclosure by federal and state statute;
391	391
392	392	(C) Disclose trade secrets or commercial or financial information which is privileged or confidential;
393	393
394	394	(D) Involve accusing a person of a crime, or formally censuring a person;
395	395
396	396	(E) Disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;
397	397
398	398	(F) Disclose investigative records compiled for law enforcement purposes;
399	399
400	400	(G) Specifically relate to the Commission's issuance of a subpoena, or its participation in a civil action or other legal proceeding.
401	401
402	402	7. For a meeting, or portion of a meeting closed pursuant to this subdivision, the Commission's legal counsel or designee shall certify that the meeting may be closed and shall reference each relevant exemptive provision. The Commission shall keep minutes which shall fully and clearly describe all matters discussed in the meeting and shall provide a full and accurate summary of actions taken, and the reasons therefor, including a description of the views expressed and the record of a roll call vote. All documents considered in connection with an action shall be identified in such minutes. All minutes and documents of a closed meeting shall remain under seal, subject to release by a majority vote of the Commission.
403	403
404	404	ARTICLE VIII
405	405
406	406	Rules and Operating Procedures:
407	407
408	408	Rulemaking Functions of the Commission
409	409
410	410	1. Rulemaking Authority. The Commission shall promulgate reasonable rules in order to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, in the event the Commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this Act or the powers granted hereunder, then such an action by the Commission shall be invalid and have no force or effect.
411	411
412	412	2. Rulemaking Procedure. Rules shall be made pursuant to a rulemaking process that substantially conforms to the Model State Administrative Procedure Act of 1981, Uniform Laws Annotated, volume 15, page 1 (2000), as amended, as may be appropriate to the operations of the Commission.
413	413
414	414	3. Effective Date. All rules and amendments, thereto, shall become effective as of the date specified in each rule, operating procedure or amendment.
415	415
416	416	4. Not later than thirty days after a rule is promulgated, any person may file a petition for judicial review of the rule; provided the filing of such a petition shall not stay or otherwise prevent the rule from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the Commission consistent with applicable law and shall not find the rule to be unlawful if the rule represents a reasonable exercise of the Commission's authority.
417	417
418	418	ARTICLE IX
419	419
420	420	Commission Records and Enforcement
421	421
422	422	1. The Commission shall promulgate rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals, insurers, insureds or surplus lines licensee trade secrets. State transaction documentation and Clearinghouse transaction data collected by the Clearinghouse shall be used for only those purposes expressed in or reasonably implied under the provisions of this compact and the Commission shall afford this data the broadest protections as permitted by any applicable law for proprietary information, trade secrets or personal data. The Commission may promulgate additional rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.
423	423
424	424	2. Except as to privileged records, data and information, the laws of any compacting state pertaining to confidentiality or nondisclosure shall not relieve any compacting state member of the duty to disclose any relevant records, data or information to the Commission; provided that disclosure to the Commission shall not be deemed to waive or otherwise affect any confidentiality requirement, and further provided that, except as otherwise expressly provided in this Act, the Commission shall not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the Commission shall remain confidential after such information is provided to any member and the Commission shall maintain the confidentiality of any information provided by a member that is confidential under that member's state law.
425	425
426	426	3. The Commission shall monitor compacting states for compliance with duly adopted bylaws and rules. The Commission shall notify any noncomplying compacting state in writing of its noncompliance with Commission bylaws or rules. If a noncomplying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default as set forth in Article XIV of this compact.
427	427
428	428	ARTICLE X
429	429
430	430	Dispute Resolution
431	431
432	432	1. Before a member may bring an action in a court of competent jurisdiction for violation of any provision, standard or requirement of the compact, the Commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and which may arise between two or more compacting states, contracting states or noncompacting states, and the Commission shall promulgate a rule providing alternative dispute resolution procedures for such disputes.
433	433
434	434	2. The Commission shall also provide alternative dispute resolution procedures to resolve any disputes between insureds or surplus lines licensees concerning a tax calculation or allocation or related issues which are the subject of this compact.
435	435
436	436	3. Any alternative dispute resolution procedures shall be utilized in circumstances where a dispute arises as to which state constitutes the home state.
437	437
438	438	ARTICLE XI
439	439
440	440	Review of Commission Decisions
441	441
442	442	Regarding Commission decisions:
443	443
444	444	1. Except as necessary for promulgating rules to fulfill the purposes of this compact, the Commission shall not have authority to otherwise regulate insurance in the compacting states.
445	445
446	446	2. Not later than thirty days after the Commission has given notice of any rule or allocation formula, any third party filer or compacting state may appeal the determination to a review panel appointed by the Commission. The Commission shall promulgate rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the Commission, in making compliance or tax determinations acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with subdivision 6 of Article III of this compact.
447	447
448	448	3. The Commission shall have authority to monitor, review and reconsider Commission decisions upon a finding that the determinations or allocations do not meet the relevant rule. Where appropriate, the Commission may withdraw or modify its determination or allocation after proper notice and hearing, subject to the appeal process in subdivision 2 of this Article.
449	449
450	450	ARTICLE XII
451	451
452	452	Finance
453	453
454	454	1. The Commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations the Commission may accept contributions, grants and other forms of funding from the state stamping offices, compacting states and other sources.
455	455
456	456	2. The Commission shall collect a fee payable by the insured directly or through a surplus lines licensee on each transaction processed through the Clearinghouse, to cover the cost of the operations and activities of the Commission and its staff in a total amount sufficient to cover the Commission's annual budget.
457	457
458	458	3. The Commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VIII of this compact.
459	459
460	460	4. The Commission shall be regarded as performing essential governmental functions in exercising such powers and functions and in carrying out the provisions of this compact and of any law relating thereto, and shall not be required to pay any taxes or assessments of any character levied by any state or political subdivision thereof upon any of the property used by it for such purposes or any income or revenue therefrom, including any profit from a sale or exchange.
461	461
462	462	5. The Commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements for all funds under its control. The internal financial accounts of the Commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the Commission shall be audited annually by an independent certified public accountant. Upon the determination of the Commission, but not less frequently than every three years, the review of the independent auditor shall include a management and performance audit of the Commission. The Commission shall make an annual report to the Governor and legislature of the compacting states, which shall include a report of the independent audit. The Commission's internal accounts shall not be confidential and such materials may be shared with the commissioner, the Comptroller, or the stamping office of any compacting state upon request provided, however, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals, and licensees' and insurers' proprietary information, including trade secrets, shall remain confidential.
463	463
464	464	6. No compacting state shall have any claim to or ownership of any property held by or vested in the Commission or to any Commission funds held pursuant to the provisions of this compact.
465	465
466	466	7. The Commission shall not make any political contributions to candidates for elected office, elected officials, political parties nor political action committees. The Commission shall not engage in lobbying except with respect to changes to this compact.
467	467
468	468	ARTICLE XIII
469	469
470	470	Compacting States, Effective Date and Amendment
471	471
472	472	1. Any state is eligible to become a compacting state.
473	473
474	474	2. The Compact shall become effective and binding upon legislative enactment of the compact into law by two compacting states, provided the Commission shall become effective for purposes of adopting rules, and creating the Clearinghouse when there are a total of ten compacting states and contracting states or, alternatively, when there are compacting states and contracting states representing greater than forty per cent of the surplus lines insurance premium volume based on records of the percentage of surplus lines insurance premiums set forth in Appendix A hereto. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state. Notwithstanding the foregoing, the Clearinghouse operations and the duty to report Clearinghouse transaction data shall begin on the first January first or July first following the first anniversary of the Commission effective date. For states which join the compact subsequent to the effective date, a start date for reporting Clearinghouse transaction data shall be set by the Commission provided surplus lines licensees and all other interested parties receive not less than ninety days' advance notice.
475	475
476	476	3. Amendments to the compact may be proposed by the Commission for enactment by the compacting states. No amendment shall become effective and binding upon the Commission and the compacting states unless and until all compacting states enact the amendment into law.
477	477
478	478	ARTICLE XIV
479	479
480	480	Withdrawal, Default and Termination
481	481
482	482	1. Withdrawal
483	483
484	484	(A) Once effective, the compact shall continue in force and remain binding upon each and every compacting state, provided that a compacting state may withdraw from the compact ("withdrawing state") by enacting a statute specifically repealing the statute which enacted the compact into law.
485	485
486	486	(B) The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any tax or compliance determinations approved on the date the repealing statute becomes effective, except by mutual agreement of the Commission and the withdrawing state, unless the approval is rescinded by the Commission.
487	487
488	488	(C) The member of the withdrawing state shall immediately notify the Executive Committee of the Commission in writing upon the introduction of legislation repealing this compact in the withdrawing state.
489	489
490	490	(D) The Commission shall notify the other compacting states of the introduction of such legislation within ten days after its receipt of notice thereof.
491	491
492	492	(E) The withdrawing state is responsible for all obligations, duties and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal. To the extent those obligations may have been released or relinquished by mutual agreement of the Commission and the withdrawing state, the Commission's determinations prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the Commission.
493	493
494	494	(F) Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.
495	495
496	496	2. Default
497	497
498	498	(A) If the Commission determines that any compacting state has at any time defaulted ("defaulting state") in the performance of any of its obligations or responsibilities under this compact, the bylaws or duly promulgated rules, then after notice and hearing as set forth in the bylaws, all rights, privileges and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the Commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities, and any other grounds designated in Commission rules. The Commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The Commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the Commission, the defaulting state shall be terminated from the compact and all rights, privileges and benefits conferred by this compact shall be terminated from the effective date of termination.
499	499
500	500	(B) Decisions of the Commission that are issued on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to subdivision 1 of this Article.
501	501
502	502	(C) Reinstatement following termination of any compacting state requires a reenactment of the compact.
503	503
504	504	3. Dissolution of Compact
505	505
506	506	(A) The compact dissolves effective upon the date of the withdrawal or default of the compacting state which reduces membership in the compact to one compacting state.
507	507
508	508	(B) Upon the dissolution of this compact, the compact becomes null and void and shall have no further force or effect, and the business and affairs of the Commission shall be wound up and any surplus funds shall be distributed in accordance with the rules and bylaws.
509	509
510	510	ARTICLE XV
511	511
512	512	Severability and Construction
513	513
514	514	1. The provisions of this compact shall be severable and if any phrase, clause, sentence or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.
515	515
516	516	2. The provisions of this compact shall be liberally construed to effectuate its purposes.
517	517
518	518	3. Throughout this compact the use of the singular shall include the plural and vice-versa.
519	519
520	520	4. The headings and captions of articles, sections and sub-sections used in this compact are for convenience only and shall be ignored in construing the substantive provisions of this compact.
521	521
522	522	ARTICLE XVI
523	523
524	524	Binding Effect of Compact and Other Laws
525	525
526	526	1. Other Laws
527	527
528	528	(A) Nothing herein prevents the enforcement of any other law of a compacting state except as provided in subparagraph (B) of this subdivision.
529	529
530	530	(B) Decisions of the Commission, any rules and any other requirements of the Commission shall constitute the exclusive rule, or determination applicable to the compacting states. Any law or regulation regarding nonadmitted insurance of multistate risks with respect to the following that is contrary to rules of the Commission is preempted:
531	531
532	532	(i) Clearinghouse transaction data reporting requirements;
533	533
534	534	(ii) Allocation formulas;
535	535
536	536	(iii) Clearinghouse transaction data collection requirements;
537	537
538	538	(iv) Premium tax payment time frames and rules concerning dissemination of data among the compacting states for nonadmitted insurance of multistate risks and single-state risks;
539	539
540	540	(v) Exclusive compliance with surplus lines law of the home state of the insured;
541	541
542	542	(vi) Rules for reporting to a Clearinghouse for receipt and distribution of Clearinghouse transaction data related to nonadmitted insurance of multistate risks;
543	543
544	544	(vii) Uniform foreign insurers eligibility requirements;
545	545
546	546	(viii) Uniform policyholder notices; and
547	547
548	548	(ix) Uniform treatment of purchasing groups procuring nonadmitted insurance.
549	549
550	550	(C) Except as stated in subparagraph (B) of this subdivision, any rule, uniform standard or other requirement of the Commission shall constitute the exclusive provision that a Commissioner may apply to compliance or tax determinations. Notwithstanding the foregoing, no action taken by the Commission shall abrogate or restrict: (i) The access of any person to state courts; (ii) the availability of alternative dispute resolution under Article X of this Compact; (iii) remedies available under state law related to breach of contract, tort, or other laws not specifically directed to compliance or tax determinations; (iv) state law relating to the construction of insurance contracts; or (v) the authority of the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.
551	551
552	552	2. Binding Effect of This Compact
553	553
554	554	(A) All lawful actions of the Commission, including all rules promulgated by the Commission, are binding upon the compacting states, except as provided herein.
555	555
556	556	(B) All agreements between the Commission and the compacting states are binding in accordance with their terms.
557	557
558	558	(C) Upon the request of a party to a conflict over the meaning or interpretation of Commission actions, and upon a majority vote of the compacting states, the Commission may issue advisory opinions regarding the meaning or interpretation in dispute. This provision may be implemented by rule at the discretion of the Commission.
559	559
560	560	(D) In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers or jurisdiction sought to be conferred by that provision upon the Commission shall be ineffective as to that state and those obligations, duties, powers or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which those obligations, duties, powers or jurisdiction are delegated by law in effect at the time this compact becomes effective.
561	561
562	562	APPENDIX A
563	563
564	564	Surplus Line Insurance Premiums by State
565	565
566	566
567	567
568	568	T1 State Premiums based Share of Total
569	569	T2 on taxes paid Premiums
570	570	T3 Alabama 445,746,000 1.47%
571	571	T4 Alaska 89,453,519 0.29%
572	572	T5 Arizona 663,703,267 2.18%
573	573	T6 Arkansas 201,859,750 0.66%
574	574	T7 California 5,622,450,467 18.49%
575	575	T8 Colorado 543,781,333 1.79%
576	576	T9 Connecticut 329,358,800 1.08%
577	577	T10 Delaware 92,835,950 0.31%
578	578	T11 Florida 2,660,908,760 8.75%
579	579	T12 Georgia 895,643,150 2.95%
580	580	T13 Hawaii 232,951,489 0.77%
581	581	T14 Idaho 74,202,255 0.24%
582	582	T15 Illinois 1,016,504,629 3.34%
583	583	T16 Indiana 412,265,320 1.36%
584	584	T17 Iowa 135,130,933 0.44%
585	585	T18 Kansas 160,279,300 0.53%
586	586	T19 Kentucky 167,996,133 0.55%
587	587	T20 Louisiana 853,173,280 2.81%
588	588	T21 Maine 60,111,200 0.20%
589	589	T22 Maryland 434,887,600 1.43%
590	590	T23 Massachusetts 708,640,225 2.33%
591	591	T24 Michigan 703,357,040 2.31%
592	592	T25 Minnesota 393,128,400 1.29%
593	593	T26 Mississippi 263,313,175 0.87%
594	594	T27 Missouri 404,489,860 1.33%
595	595	T28 Montana 64,692,873 0.21%
596	596	T29 Nebraska 92,141,167 0.30%
597	597	T30 Nevada 354,271,514 1.17%
598	598	T31 New Hampshire 102,946,250 0.34%
599	599	T32 New Jersey 1,087,994,033 3.58%
600	600	T33 New Mexico 67,608,458 0.22%
601	601	T34 New York 2,768,618,083 9.11%
602	602	T35 North Carolina 514,965,060 1.69%
603	603	T36 North Dakota 36,223,943 0.12%
604	604	T37 Ohio 342,000,000 1.12%
605	605	T38 Oklahoma 319,526,400 1.05%
606	606	T39 Oregon 312,702,150 1.03%
607	607	T40 Pennsylvania 780,666,667 2.57%
608	608	T41 Rhode Island 71,794,067 0.24%
609	609	T42 South Carolina 412,489,825 1.36%
610	610	T43 South Dakota 38,702,120 0.13%
611	611	T44 Tennessee 451,775,240 1.49%
612	612	T45 Texas 3,059,170,454 10.06%
613	613	T46 Utah 142,593,412 0.47%
614	614	T47 Vermont 41,919,433 0.14%
615	615	T48 Virginia 611,530,667 2.01%
616	616	T49 Washington 739,932,050 2.43%
617	617	T50 West Virginia 130,476,250 0.43%
618	618	T51 Wisconsin 248,758,333 0.82%
619	619	T52 Wyoming 40,526,967 0.13%
620	620	T53
621	621	T54 Total 30,400,197,251 100.00%
622	622
623	623	T1
624	624
625	625	State
626	626
627	627	Premiums based
628	628
629	629	Share of Total
630	630
631	631	T2
632	632
633	633	on taxes paid
634	634
635	635	Premiums
636	636
637	637	T3
638	638
639	639	Alabama
640	640
641	641	445,746,000
642	642
643	643	1.47%
644	644
645	645	T4
646	646
647	647	Alaska
648	648
649	649	89,453,519
650	650
651	651	0.29%
652	652
653	653	T5
654	654
655	655	Arizona
656	656
657	657	663,703,267
658	658
659	659	2.18%
660	660
661	661	T6
662	662
663	663	Arkansas
664	664
665	665	201,859,750
666	666
667	667	0.66%
668	668
669	669	T7
670	670
671	671	California
672	672
673	673	5,622,450,467
674	674
675	675	18.49%
676	676
677	677	T8
678	678
679	679	Colorado
680	680
681	681	543,781,333
682	682
683	683	1.79%
684	684
685	685	T9
686	686
687	687	Connecticut
688	688
689	689	329,358,800
690	690
691	691	1.08%
692	692
693	693	T10
694	694
695	695	Delaware
696	696
697	697	92,835,950
698	698
699	699	0.31%
700	700
701	701	T11
702	702
703	703	Florida
704	704
705	705	2,660,908,760
706	706
707	707	8.75%
708	708
709	709	T12
710	710
711	711	Georgia
712	712
713	713	895,643,150
714	714
715	715	2.95%
716	716
717	717	T13
718	718
719	719	Hawaii
720	720
721	721	232,951,489
722	722
723	723	0.77%
724	724
725	725	T14
726	726
727	727	Idaho
728	728
729	729	74,202,255
730	730
731	731	0.24%
732	732
733	733	T15
734	734
735	735	Illinois
736	736
737	737	1,016,504,629
738	738
739	739	3.34%
740	740
741	741	T16
742	742
743	743	Indiana
744	744
745	745	412,265,320
746	746
747	747	1.36%
748	748
749	749	T17
750	750
751	751	Iowa
752	752
753	753	135,130,933
754	754
755	755	0.44%
756	756
757	757	T18
758	758
759	759	Kansas
760	760
761	761	160,279,300
762	762
763	763	0.53%
764	764
765	765	T19
766	766
767	767	Kentucky
768	768
769	769	167,996,133
770	770
771	771	0.55%
772	772
773	773	T20
774	774
775	775	Louisiana
776	776
777	777	853,173,280
778	778
779	779	2.81%
780	780
781	781	T21
782	782
783	783	Maine
784	784
785	785	60,111,200
786	786
787	787	0.20%
788	788
789	789	T22
790	790
791	791	Maryland
792	792
793	793	434,887,600
794	794
795	795	1.43%
796	796
797	797	T23
798	798
799	799	Massachusetts
800	800
801	801	708,640,225
802	802
803	803	2.33%
804	804
805	805	T24
806	806
807	807	Michigan
808	808
809	809	703,357,040
810	810
811	811	2.31%
812	812
813	813	T25
814	814
815	815	Minnesota
816	816
817	817	393,128,400
818	818
819	819	1.29%
820	820
821	821	T26
822	822
823	823	Mississippi
824	824
825	825	263,313,175
826	826
827	827	0.87%
828	828
829	829	T27
830	830
831	831	Missouri
832	832
833	833	404,489,860
834	834
835	835	1.33%
836	836
837	837	T28
838	838
839	839	Montana
840	840
841	841	64,692,873
842	842
843	843	0.21%
844	844
845	845	T29
846	846
847	847	Nebraska
848	848
849	849	92,141,167
850	850
851	851	0.30%
852	852
853	853	T30
854	854
855	855	Nevada
856	856
857	857	354,271,514
858	858
859	859	1.17%
860	860
861	861	T31
862	862
863	863	New Hampshire
864	864
865	865	102,946,250
866	866
867	867	0.34%
868	868
869	869	T32
870	870
871	871	New Jersey
872	872
873	873	1,087,994,033
874	874
875	875	3.58%
876	876
877	877	T33
878	878
879	879	New Mexico
880	880
881	881	67,608,458
882	882
883	883	0.22%
884	884
885	885	T34
886	886
887	887	New York
888	888
889	889	2,768,618,083
890	890
891	891	9.11%
892	892
893	893	T35
894	894
895	895	North Carolina
896	896
897	897	514,965,060
898	898
899	899	1.69%
900	900
901	901	T36
902	902
903	903	North Dakota
904	904
905	905	36,223,943
906	906
907	907	0.12%
908	908
909	909	T37
910	910
911	911	Ohio
912	912
913	913	342,000,000
914	914
915	915	1.12%
916	916
917	917	T38
918	918
919	919	Oklahoma
920	920
921	921	319,526,400
922	922
923	923	1.05%
924	924
925	925	T39
926	926
927	927	Oregon
928	928
929	929	312,702,150
930	930
931	931	1.03%
932	932
933	933	T40
934	934
935	935	Pennsylvania
936	936
937	937	780,666,667
938	938
939	939	2.57%
940	940
941	941	T41
942	942
943	943	Rhode Island
944	944
945	945	71,794,067
946	946
947	947	0.24%
948	948
949	949	T42
950	950
951	951	South Carolina
952	952
953	953	412,489,825
954	954
955	955	1.36%
956	956
957	957	T43
958	958
959	959	South Dakota
960	960
961	961	38,702,120
962	962
963	963	0.13%
964	964
965	965	T44
966	966
967	967	Tennessee
968	968
969	969	451,775,240
970	970
971	971	1.49%
972	972
973	973	T45
974	974
975	975	Texas
976	976
977	977	3,059,170,454
978	978
979	979	10.06%
980	980
981	981	T46
982	982
983	983	Utah
984	984
985	985	142,593,412
986	986
987	987	0.47%
988	988
989	989	T47
990	990
991	991	Vermont
992	992
993	993	41,919,433
994	994
995	995	0.14%
996	996
997	997	T48
998	998
999	999	Virginia
1000	1000
1001	1001	611,530,667
1002	1002
1003	1003	2.01%
1004	1004
1005	1005	T49
1006	1006
1007	1007	Washington
1008	1008
1009	1009	739,932,050
1010	1010
1011	1011	2.43%
1012	1012
1013	1013	T50
1014	1014
1015	1015	West Virginia
1016	1016
1017	1017	130,476,250
1018	1018
1019	1019	0.43%
1020	1020
1021	1021	T51
1022	1022
1023	1023	Wisconsin
1024	1024
1025	1025	248,758,333
1026	1026
1027	1027	0.82%
1028	1028
1029	1029	T52
1030	1030
1031	1031	Wyoming
1032	1032
1033	1033	40,526,967
1034	1034
1035	1035	0.13%
1036	1036
1037	1037	T53
1038	1038
1039	1039	T54
1040	1040
1041	1041	Total
1042	1042
1043	1043	30,400,197,251
1044	1044
1045	1045	100.00%
1046	1046
1047	1047	This Data is 2005 Calendar Year Data excerpted from a study dated February 27, 2007 by Mackin & Company.
1048	1048
1049	1049
1050	1050
1051	1051
1052	1052	This act shall take effect as follows and shall amend the following sections:
1053	1053	Section 1 July 1, 2011 New section
1054	1054
1055	1055	This act shall take effect as follows and shall amend the following sections:
1056	1056
1057	1057	Section 1
1058	1058
1059	1059	July 1, 2011
1060	1060
1061	1061	New section
1062	1062
1063	1063	Statement of Purpose:
1064	1064
1065	1065	To enter into the Surplus Lines Insurance Multistate Compliance Compact.
1066	1066
1067	1067	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]